At time of writing this, the Petrol prices are hiked for 5 consecutive days at ₹112.5/litre in Mumbai.
The reason for this price hikes is because of sharp rise in crude prices to >$120/barrel and India being 2nd largest importer of crude oil.
This rise will increase inflation.
Daily essentials like fruits, vegetables, milk, etc are likely to become more expensive because of rise in transportation costs caused by high petrol/diesel prices.
Another sector which may impact would be FMCG because of rise in Raw Material prices.
Telecom tower operator’s profit margins may also dampen because diesel is used in generators keeping these towers up 24/7.
Auto’s may face the heat via poor consumer sentiments caused by high fuel prices.
Consumer spending on high priced fuel consumption may lead to lower disposal income amongst low income groups. Thereby sucking some liquidity in consumer space.
It may appear that standalone only petrol prices are rising, though it affects nearly all segments of market bearing IT.
Ironically, essentials prices increase along with rise in petrol prices. However when the crude prices will fall, the prices of petrol & other essentials will stay the same.
